Correlation Between DSS and Allison Transmission
Can any of the company-specific risk be diversified away by investing in both DSS and Allison Transmission at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining DSS and Allison Transmission into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSS Inc and Allison Transmission Holdings, you can compare the effects of market volatilities on DSS and Allison Transmission and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in DSS with a short position of Allison Transmission. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSS and Allison Transmission.
Diversification Opportunities for DSS and Allison Transmission
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DSS and Allison is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding DSS Inc and Allison Transmission Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allison Transmission and DSS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on DSS Inc are associated (or correlated) with Allison Transmission. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allison Transmission has no effect on the direction of DSS i.e., DSS and Allison Transmission go up and down completely randomly.
Pair Corralation between DSS and Allison Transmission
Considering the 90-day investment horizon DSS Inc is expected to under-perform the Allison Transmission. In addition to that, DSS is 1.46 times more volatile than Allison Transmission Holdings. It trades about -0.29 of its total potential returns per unit of risk. Allison Transmission Holdings is currently generating about 0.37 per unit of volatility. If you would invest 9,964 in Allison Transmission Holdings on August 27, 2024 and sell it today you would earn a total of 2,001 from holding Allison Transmission Holdings or generate 20.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DSS Inc vs. Allison Transmission Holdings
Performance |
| Timeline |
| DSS Inc |
| Allison Transmission |
DSS and Allison Transmission Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSS and Allison Transmission
The main advantage of trading using opposite DSS and Allison Transmission positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSS position performs unexpectedly, Allison Transmission can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Allison Transmission will offset losses from the drop in Allison Transmission's long position.The idea behind DSS Inc and Allison Transmission Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Allison Transmission vs. Gentex | Allison Transmission vs. Adient PLC | Allison Transmission vs. Autoliv | Allison Transmission vs. Fox Factory Holding |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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